Indicate by
check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405
of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See
definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer

¨

Accelerated Filer

x

Non-Accelerated Filer

¨

Smaller Reporting Company

¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).

Yes ¨ No x

Indicate the number of shares outstanding of each of the issuers classes of
common stock, as of the latest practicable date.

The consolidated financial statements include the accounts of Provident New York Bancorp (Provident Bancorp or the
Company), Hardenburgh Abstract Title Company, Inc., which provides title searches and insurance for residential and commercial real estate, Hudson Valley Investment Advisors, LLC (HVIA), a registered investment advisor, Provident
Risk Management, (a captive insurance company), Provident Bank (the Bank), and the Banks wholly owned subsidiaries. These subsidiaries are (i) Provident Municipal Bank (PMB) which is a limited-purpose, New York
State-chartered commercial bank formed to accept deposits from municipalities in the Companys market area, (ii) Provident REIT, Inc. and WSB Funding, Inc. which are real estate investment trusts that hold a portion of the Companys
real estate loans, (iii) Provest Services Corp. I, which has invested in a low-income housing partnership, (iv) Provest Services Corp. II, which has engaged a third-party provider to sell mutual funds and annuities to the Banks
customers, and (v) companies that hold foreclosed properties acquired by the Bank. Intercompany transactions and balances are eliminated in consolidation.

The Companys off-balance sheet activities are limited to loan origination commitments, loan commitments pending sale, lines of credit extended to customers and letters of credit on behalf of
customers, which all occur in the ordinary course of its lending activities. In addition, the Company purchased interest rate caps with a notional value of $50,000 during the first quarter of fiscal 2010. The Company does not engage in off-balance
sheet financing transactions or other activities involving the use of special-purpose or variable interest entities.

The consolidated
financial statements have been prepared by management without audit, but, in the opinion of management, include all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the Companys financial position and
results of operations as of the dates and for the periods presented. Although certain information and footnote disclosures have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission applicable to
quarterly reports on Form 10-Q, the Company believes that the disclosures are adequate to make the information presented clear. The results of operations for the three months and six months ended March 31, 2012 are not necessarily indicative of
results to be expected for other interim periods or the entire fiscal year ending September 30, 2012. The unaudited consolidated financial statements presented herein should be read in conjunction with the annual audited financial statements
included in the Companys Form 10-K for the fiscal year ended September 30, 2011.

The consolidated financial statements have been
prepared in conformity with accounting principles generally accepted in the United States of America. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of
assets, liabilities, income and expense. Actual results could differ significantly from these estimates. A material estimate that is particularly susceptible to near-term change is the allowance for loan loss (see note 4), which reflects the
application of a critical accounting policy.

Certain loan amounts from prior periods have been reclassified to conform to the current fiscal
year presentation.

2. Stock-Based Compensation

The Company has two share based compensation plans as described below. Total compensation cost that has been charged against income for
those plans was $181, and $176, for the three months ending March 31, 2012 and 2011. There was no income tax benefit for the three months ending March 31, 2012 and 2011. Total compensation cost that has been charged against income for
those plans was $373, and $339, for the six months ending March 31, 2012 and 2011. There was no income tax benefit for the six months ending March 31, 2012 and 2011.

Stock Option Plan

The Companys shareholders approved the 2012 Employee Share Option
Plan (stock option plan) on February 16, 2012. The plan, permits the grant of share options to employees for up to 2,890,000 shares of common stock as of March 31, 2012. The plan allows for the following type of stock based awards to be
issued: options, stock appreciation rights, restricted stock awards, performance based restricted stock awards, restricted stock unit awards, deferred stock awards, performance unit awards or other stock based awards. Option awards are generally
granted with an exercise price equal to the market price of the Companys common stock at the date of grant; those option awards have vesting periods ranging from 2 to 5 years and have 10 year contractual terms. The Company has a policy of
using shares held as treasury stock to satisfy share option exercises. Currently, the Company has a sufficient number of treasury shares to satisfy expected share option exercises.

The Companys 2004 Employee Share Option Plan (stock option plan), which is shareholder-approved, permits the grant of share options to its employees for up to 19,107 shares of common stock as of
March 31, 2012. Option awards are generally granted with an exercise price equal to the market price of the Companys common stock at the date of grant; those option awards have vesting periods ranging from 2 to 5 years and have 10 year
contractual terms. The Company has a policy of using shares held as treasury stock to satisfy share option exercises. Currently, the Company has a sufficient number of treasury shares to satisfy expected share option exercises.

The fair value of each option award is estimated on the date of grant using a closed form option
valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatilities of the Companys common stock. The expected term of options granted is based on historical data and
represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield
curve in effect at the time of the grant.

The fair value of options granted was determined using the following weighted-average assumptions
as the grant date:

Six months ended

March 31,

2012

2011

Risk-free interest rate (1)

1.5

%



Expected stock price volatility

39.8

%



Dividend yield (2)

3.1

%



Expected term in years

5.8



The following table summarizes the Companys stock option activity for the six months ended March 31, 2012:

Number ofShares

WeightedAverageExercisePrice

Outstanding at October 1, 2011

1,906,020

$

12.20

Granted

419,500

7.73

Exercised





Forfeited

(241,000

)

12.36

Outstanding at March 31, 2012

2,084,520

$

11.28

Exercisable at March 31, 2012

1,419,944

$

12.63

Weighted average estimated fair value of options granted during the period

$

2.27

Information related to the stock option plan during each year follows:

2012

2011

2010

Intrinsic value of options exercised

$



$



$

1,615

Cash received from option exercises





984

Tax benefit realized from option exercises







Weighted average fair value of options granted

2.27

2.27

2.69

As of March 31, 2012, there was $1,216 of total unrecognized compensation cost related to non-vested stock options
granted under the Plan. The cost is expected to be recognized over a weighted-average period of 1.6 years.

There were no modifications for
the six months ending March 31, 2012 and 2011.

The Companys 2004 Recognition and Retention Plan (RRP) provides for the issuance of shares to directors and officers. Compensation expense is recognized on a straight line basis over the
vesting period of the awards based on the fair value of the stock at issue date. RRP shares vest annually on the anniversary of the grant date over the vesting period.Total shares remaining that are authorized and available for future grant
under the RRP are 2,120 at March 31, 2012. Inducement shares of 41,370 were issued in July 2011.

The approval of the 2012 Employee Share
Option Plan will provide for the Company to issue RRP shares.

A summary of restricted stock award activity for the six months ended
March 31, 2012, is presented below:

Numberof Shares

WeightedAverageGrant-DateFair Value

Nonvested shares at September 30, 2011

57,520

$

8.77

Granted

36,000

7.40

Vested





Forfeited

(1,000

)

9.85

Nonvested shares at March 31, 2012

92,520

$

8.23

As of March 31, 2012, there was $613 of total unrecognized compensation cost related to non-vested shares granted
under the RRP. The cost is expected to be recognized over a weighted-average period of 2.69 years.

3. Recent Accounting Standards, Not Yet Adopted

Accounting standards update (ASU) 2011-11, Balance Sheet (Topic 210)Disclosures about offsetting Assets and Liabilities
has been issued to enhance disclosures required by U.S. GAAP by requiring improved information about financial instruments that are either (1) offset or (2) subject to an enforceable master netting arrangement. This information will
enable users of an entitys financial statements to evaluate the effect or potential effect of netting arrangements on an entitys financial position. This standard is effective for the Company on January 1, 2013 and is not expected
to have a material effect on the Companys consolidated financial statements.

Adoption of New Accounting Standards

Accounting Standards Update (ASU) 2011-03, Transfers and Servicing (Topic 860) - Reconsideration of Effective Control for
Repurchase Agreements has been issued, which is to improve the accounting for repurchase agreements and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. This standard
was effective for theCompany on January 1, 2012 and did not have a material effect on the Companys consolidated financial statements.

Accounting Standards Update (ASU) 2011-04, Fair Value Measurement (Topic 820)-Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS has been
issued, which will conform the meaning and disclosurerequirements of fair value measurement between U.S. GAAP and IFRS. This standard was effective for the Company on January 1,2012 and did not have a material effect on the
Companys consolidated financial statements.

Accounting Standards Update (ASU) 2011-05- Presentation of Comprehensive Income
(Topic 220) has been issued. This standardwas issued to conform U.S. GAAP and IFRS as well as to increase the prominence of items reported in other comprehensive income.This standard was effective for the Company on January 1,2012 and did not have a material effect on the Companys consolidated financial statements.

The components of the loan portfolio, excluding loans held for sale, were as follows:

March 31, 2012

September 30, 2011

One- to four-family residential mortgage loans

$

366,675

$

389,765

Commercial real estate loans

854,661

703,356

Commercial business loans

198,547

209,923

Acquisition, development & construction loans

163,808

175,931

Total Commercial loans

1,217,016

1,089,210

Consumer loans:

Home equity lines of credit

168,603

174,521

Homeowner loans

38,092

40,969

Other consumer loans, including overdrafts

8,726

9,334

215,421

224,824

Total loans

1,799,112

1,703,799

Allowance for loan losses

(27,787

)

(27,917

)

Total loans, net

$

1,771,325

$

1,675,882

Total loans include net deferred loan origination fees of $77 at March 31, 2012 and $308 net deferred loan
origination costs at September 30, 2011.

Loans where management has the intent and ability to hold for the foreseeable future or until
maturity or payoff (other than loans held for sale) are reported at amortized cost less the allowance for loan losses. Interest income on loans is accrued on the level yield method.

A loan is placed on non-accrual status when management has determined that the borrower may likely be unable to meet contractual principal or interest obligations, or when payments are 90 days or more
past due, unless well secured and in the process of collection. Accrual of interest ceases and, in general, uncollected past due interest is reversed and charged against current interest income, while interest recorded in the prior year is charged
to the allowance for loan losses. Interest payments received on non-accrual loans, including impaired loans, are not recognized as income unless warranted based on the borrowers financial condition and payment record.

The Company defers nonrefundable loan origination and commitment fees, and certain direct loan origination costs, and amortizes the net amount as an
adjustment of the yield over the estimated life of the loan. If a loan is prepaid or sold, the net deferred amount is recognized in the statement of income at that time. Interest and fees on loans include prepayment fees and late charges collected.

The allowance for loan losses (the allowance) is increased through provisions charged against current earnings and additionally
by crediting amounts of recoveries received, if any, on previously charged-off loans. The allowance is reduced by charge-offs on loans, in accordance with established policies, when all efforts of collection have been exhausted. The allowance is
maintained at a level estimated to absorb probable credit losses inherent in the loan portfolio as well as other credit risk related charge-offs. The allowance is based on ongoing evaluations of the probable estimated losses inherent in the
performing loan portfolio, as well as reserves for impaired loans.

The Banks methodology for evaluating the appropriateness of the
allowance includes grouping the performing loan portfolio into loan segments based on common risk characteristics, tracking the historical levels of classified loans and delinquencies, applying economic outlook factors, assigning specific
incremental reserves where necessary, providing specific reserves on impaired loans, and assessing the nature and trend of loan charge-offs. Additionally, the volume of delinquencies and non-performing loans, loan trends, concentration risks by
relationship, type, and , collateral adequacy, credit policies and procedures, staffing, underwriting consistency, loan review and economic conditions are taken into consideration.

The allowance for loan losses consists of the following elements: (i) specific reserves for
individually impaired credits, (ii) reserves for other loans based on historical loss factors, (iii) reserves based on general economic conditions and other qualitative risk factors both internal and external to Provident Bank, including
changes in loan portfolio volume and the composition and concentrations of credit.

The Credit and Risk Management Department individually
evaluates non-accrual (non-homogeneous) loans and all troubled debt restructured loans to determine if an impairment reserve is needed. The Company considers a loan to be impaired when, based on current information and events, it is probable that
the borrower will be unable to comply with contractual principal and interest payments due. Smaller-balance homogeneous loans are collectively evaluated for impairment, such as residential mortgage loans and consumer loans. The value of an impaired
loan is measured based upon the underlying anticipated method of payment consisting of either the present value of expected future cash flows discounted at the loans effective interest rate, or the fair value of the collateral, if the loan is
collateral dependent, and its payment is expected solely based on the underlying collateral. If the value of an impaired loan is less than its carrying amount, impairment is recognized through a provision to the allowance for loan losses. Loans in
the commercial real estate segment are re-appraised using a summary report every six to nine months, and segments for residential mortgages, ELOCs, and Homeowner loans are also re-appraised every six to nine months primarily using drive-by
appraisals because of the limitations on entering the premises for a full evaluation. All loans in real estate secured segments are evaluated for impairment on a quarterly basis based on information obtained by following ASU-2010-10-50,
Receivables (Topic 310) guidelines. If the book value exceeds the fair market value of the collateral the difference is charged in that quarter to the allowance. This quarterly evaluation of value continues until the loan is transferred to
Other Real Estate Owned (OREO) or is paid-off. If the loan is transferred to OREO, the Allowance for Loan and Lease Losses is charged for any subsequent negative adjustments that occur within a reporting period or 90 days, whichever is less.
Subsequent negative adjustments are charged to the Banks income account - All other segments that are not secured by real estate are written off to the allowance between 90 or 120 days of deliquency or sooner if deemed uncollectible such as in
the case of a bankruptcy. Once charged off all subsequent collection and legal expenses are expensed.

Collateral dependent impaired loan
balances are written down to the current fair value. If repayment is based upon future expected cash flows, the present value of the expected future cash flows discounted at the loans original effective interest rate is compared to the
carrying value of the loan, and any shortfall is recorded as a specific valuation allowance in the allowance for loan losses. Accrual of interest is discontinued on an impaired loan when management believes, after considering collection efforts and
other factors, the borrowers financial condition is such that collection of interest is doubtful. Cash collections on impaired loans are generally credited to the loan balance, and no interest income is recognized on these loans until the
principal balance has been determined to be fully collectible.

A substantial portion of the Companys loan portfolio is secured by
residential and commercial real estate located primarily in Rockland and Orange Counties of New York and contiguous areas such as Ulster, Sullivan, Putnam and Westchester Counties of New York, Bergen County, New Jersey and New York City. The ability
of the Companys borrowers to make principal and interest payments is dependent upon, among other things, the level of overall economic activity and the real estate market conditions prevailing within the Companys concentrated lending
area. Commercial real estate and acquisition, development and construction loans are considered by management to be of somewhat greater credit risk than loans to fund the purchase of a primary residence due to the generally larger loan amounts and
dependency on income production or sale of the real estate. Substantially all of these loans are collateralized by real estate located in the Companys primary market area.

The allowances established for inherent losses on specific loans are based on a regular analysis and evaluation of the loans. Loans are evaluated based on an internal credit risk rating system for the
commercial loan portfolio segments and non-performing loan status for the residential and consumer loan portfolio segments. Loans are risk-rated based on an internal credit risk grading process that evaluates, among other things: (i) the
obligors ability to repay; (ii) the underlying collateral, if any; and (iii) the economic environment and industry in which the borrower operates. This analysis is performed at the relationship manager level for all loans, and
reviewed by the Portfolio Risk Management Department. Loans with a grade that is below Pass grade are adversely classified. Any change in the credit risk grade of performing and/or non-performing loans affects the amount of the related
allowance. Once a loan is adversely classified, the assigned relationship manager and/or a special assets officer in conjunction with the Credit and Portfolio Risk Management Department analyze the loan to determine whether the loan is impaired and,
if impaired, the need to specifically allocate a portion of the allowance for loan losses to the loan. Specific valuation allowances are determined by analyzing the borrowers ability to repay amounts owed, collateral deficiencies, the relative
risk grade of the loan and economic conditions affecting the borrowers industry, among other things. Loans identified as losses by management are charged-off. Loans are assessed for full or partial charge-off when they are between 90 and 120
days past due or sooner if deemed uncollectible. Furthermore, residential mortgage and consumer loan accounts are charged off in accordance with regulatory requirements.

The allowance allocations for other loans (i.e.; risk rated loans that are not adversely classified and loans that are not risk rated) are calculated by applying historical loss factors for each loan
portfolio segment to the applicable outstanding loan portfolio balances. Loss factors are calculated using a historical loss analysis supplemented by management judgment of general economic conditions and other qualitative risk factors both internal
and external to Provident Bank. The management analysis includes an evaluation of loan portfolio volumes, the composition and concentrations of credit, credit quality and current delinquency trends.

The allowance also contains reserves to cover inherent losses within each of Providents loan portfolio segments, which have not been otherwise
reviewed or measured on an individual basis. Such reserves include managements evaluation of national and local economic and business conditions, loan portfolio volumes, the composition and concentrations of credit, credit quality and
delinquency trends. These reserves reflect managements attempt to ensure that the overall allowance reflects a margin for imprecision and the uncertainty that is inherent in estimates of probable credit losses.

The following table sets forth the loans evaluated for impairment by segment at September 30, 2011:

September 30, 2011

Individuallyevaluated forimpairment

Collectivelyevaluated forimpairment

Totalending
loansbalance

Loans by segment:

Real estateresidential mortgage

$

8,573

$

381,192

$

389,765

Real estatecommercial mortgage

10,653

599,726

610,379

Real estatecommercial mortgage (CBL)

4,477

88,500

92,977

Commercial business loans

531

133,868

134,399

Commercial business loans (CBL)



75,524

75,524

Acquisition Development & Construction

28,223

147,708

175,931

Consumer, including home equity

2,504

222,320

224,824

Total Loans

$

54,961

$

1,648,838

$

1,703,799

The following table sets forth the allowance evaluated for impairment by segment at September 30, 2011:

September 30, 2011

Individuallyevaluated forimpairment

Collectivelyevaluated forimpairment

Totalallowancebalance

Ending allowance by segment:

Real estateresidential mortgage

$

1,069

$

2,429

$

3,498

Real estatecommercial mortgage

474

4,059

4,533

Real estatecommercial mortgage (CBL)

594

441

1,035

Commercial business loans



1,331

1,331

Commercial business loans (CBL)



4,614

4,614

Acquisition Development & Construction

1,409

8,486

9,895

Consumer, including home equity

260

2,751

3,011

Total allowance

$

3,806

$

24,111

$

27,917

A loan is impaired when it is probable that a creditor will be unable to collect all amounts due according to the
contractual terms of the loan agreement. Impaired loans substantially consist of non-performing loans and accruing and performing troubled debt restructured loans. The recorded investment of an impaired loan includes the unpaid principal balance,
negative escrow and any tax in arrears.

Troubled debt restructurings are renegotiated loans for which concessions have been granted to the borrower that the Company would not have otherwise granted and the borrower is experiencing financial
difficulty. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without modification.
This evaluation is performed under the Companys internal underwriting policy. The modification of the terms of such loans include one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the
maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the recorded investment in the loan. Modifications involving a reduction of the stated interest rate of the
loan were for period ranging from 3 months to 30 years. Modifications involving an extension of the maturity date were for periods ranging from 3 months to 30 years. Restructured loans are recorded in accrual status when the loans have demonstrated
performance, generally evidenced by six months of payment performance in accordance with the restructured terms, or by the presence of other significant items.

Not all loans that are restructured as a TDR are classified as non accrual before the restructuring occurs. If the subsequent TDR designation of these accruing loans has been assigned because of a below
market interest rate or an extension of time, the new restructured loan will remain on accrual. As noted all other loan restructures requires a minimum of 6 months of performance in accordance with the regulatory guideline.

The Company has committed to lend additional amounts totaling up to $4,225 as of March 31, 2012, and
September 30, 2011, to customers with outstanding loans that are classified as troubled debt restructurings. The commitments to lend on the restructured debt is contingent on clear title and a third party inspection to verify completion of work
and is associated with loans that are considered to be performing.

The following table presents loans by class modified as troubled debt
restructurings that occurred during the six months ending March 31, 2012:

Recorded Investment

Number

Pre-Modification

Post -Modification

Restructured Loans:

Real estateresidential mortgage

4

$

1,009

$

995

Real estatecommercial mortgage

2

421

436

Total restructured loans

6

$

1,430

$

1,431

The troubled debt restructurings described above increased the allowance for loan losses by $0 for the three months ended
March 31, 2012 and $134 for the six months ended March 31, 2012. There were no charge offs as a result of the above troubled debt restructurings.

A loan is considered to be in default once it is 90 days contractually past due under the modified
terms. The following table presents by class loans that were modified as troubled debt restructurings during the last twelve months that have subsequently defaulted during the three and six months ended March 31, 2012:

Three Months EndedMarch 31, 2012

Six Months EndedMarch 31, 2012

Number ofLoans

RecordedInvestment

Number ofLoans

RecordedInvestment

Acquisition Development & Construction

1

$

446

1

$

446

Real estate-commercial mortgage





1

850

Total

1

$

446

2

$

1,296

Credit Quality Indicators:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience,
credit documentation, public information and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis includes all loans. This analysis is performed on a monthly
basis on all criticized/classified loans. The Company uses the following definitions of risk ratings:

Special Mention. Loans
classified as special mention have a potential weakness that deserves managements close attention. If left uncorrected these potential weaknesses may result in the deterioration of the repayment prospects for the loan or the institutions
credit position at some future date.

Substandard. Loans classified as substandard are inadequately protected by the current net
worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of debt. They are characterized by the distinct possibility that the
institution will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans classified as doubtful have all the
weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated
loans. Based on the most recent analysis performed as of March 31, 2012 and September 30, 2011, the risk category of loans by segment of gross loans is as follows: